If you're going on vacation this summer, you've probably already booked some of the key elements, like your flight or cruise. But have you purchased travel insurance? Travel sites make it pretty easy these days to add trip protection to your purchase, but what does that fee get you, and when is the extra cost actually worth it?
There are generally two kinds of trip insurance:
- Basic trip cancellation protection, which usually covers lost bags, reimbursements if you miss a connection and a refund if you can't travel because you're sick or hurt.
- Comprehensive travel insurance, which typically covers all that, plus any expenses related to medical or dental emergencies, disaster evacuations and even costs associated with accidental deaths. Basically this is a combo of travel and medical costs.
If you're going to get trip or travel insurance (the two terms are pretty much interchangeable), experts usually recommend the comprehensive kind. You can even purchase a policy that comes with a "cancel for any reason" safeguard, which is ideal if you're traveling to places that might experience political unrest.
If you haven't paid extra for the "cancel for any reason" policy, you'll likely encounter strict guidelines for when you're eligible for reimbursement. For example, if you get sick before a trip, you'll need to get a doctor's note before cancelling if you want to be reimbursed.
"Do a little bit of homework as to how much risk you're even taking on so you can make an informed decision," Maria Teresa Hart, executive editor of the hotel review site Oyster.com, tells CNBC Make It.
All-in-one policies cost about 56 percent more than basic trip insurance, according to an analysis by finance research site ValuePenguin of the top 50 offerings on the market. You can expect to spend, on average, $164 for each. For those on a tight budget, that extra money can be the difference between being able to afford a fancy dinner or a nice hotel and not being able to splurge. So it pays to know when you really need to spend on extra protection.